Security concerns boost Group 4

Asylum seekers break out of Woomera in Australia

The world's second-largest security firm, Denmark's Group 4 Falck, has reported a 35% jump in net profits, crediting strong demand for its services in the wake of the 11 September attacks.

Group 4, which is at the vanguard of global security service privatisation, made a 492m Danish crown (£42m; $66.5m) net profit for the three months to September.

Group 4 was embarrassed by the Yarl's Wood fire

The company pioneered the private contracting of prisons in Britain, but was embroiled in controversy in February after a fire virtually destroyed the Yarl's Wood asylum seekers detention centre.

Group 4's higher profits also reflected the impact of recent acquisitions, including its $573m takeover of the second largest US security group Wackenhut Corrections.

Sales growth including Wackenhut was 14.6%, but would have only been 8.7% otherwise. Total turnover in the quarter rose 51% compared with the same period last year to 23.3bn crowns.

"The US guarding operation showed very strong organic growth and significant margin improvement," the company said in a statement.

Guarding operations account for 58% of turnover.

Britain happy

In October, British competition authorities cleared Group 4's take over of Wackenhut.

Competition Minister Melanie Johnson gave the go-ahead after Wackenhut, its UK subsidiary Premier, and Group 4 promised to keep the competing bids of both firms confidential.

There are only two smaller players in the UK market behind Group 4 and Wackenhut - French multinational Sodexho's UK Detention Services, which runs three prisons, and Securicor, which operates one.

Greater involvement of the private sector in prison construction and management is a key part of the British government's private finance initiative.

Prison trouble

Group 4 is reportedly looking to sell the Woomera asylum seekers detention centre in Australia, which it acquired in the takeover of Wackenhut.

Prisoners at the camp - mainly Afghans and Iraqis - sewed together their lips and threw themselves on surrounding razor wire earlier this year to protest at conditions there.

Group 4 also acquired Israel's largest security firm Hashmira, but withdrew its private guards from the West Bank after the legality of their operations was questioned.

Group 4 now has more than 230,000 employees in more than 80 countries.

Wackenhut manages more than fifty prison, detention and mental health facilities in North America, Europe, Australia, New Zealand and South Africa.